A new proposal from Senate Democrats could empower the Treasury Department to designate decentralized finance (DeFi) platforms, potentially including Tornado Cash, as restricted.

DeFi Restricted List Proposal

The Treasury Department is considering a DeFi restricted list that would allow it to identify decentralized finance protocols deemed excessively risky.

This designation could lead to the criminalization of using these protocols and require Know Your Customer (KYC) protocols on cryptocurrency interfaces.

Concerns have been raised regarding the potential impact of this proposal.